Superannuation Intensive
The Tax Institute
Challenges to death benefits and binding death benefit nominations (BDBNs) have been regularly popping up in court decisions for last couple of decades.
A member’s will cannot deal with their super benefits, unless the benefits are paid to the estate of the member. Consequently, a person’s super benefits must be dealt with separately in the estate planning process. Rather than dealing with super in a person’s will the tools for dealing with super death benefits are BDBNs, reversionary pensions, and the control of the decision making process through the control of the super fund trustee.
The different ways in which death benefits have been challenged over the past decade can be divided into five broad frontiers, which form the four topics of this paper. Those five categories are:
Control cases;
BDBN challenge cases;
Conflict of interest cases;
Discretion challenge (claim staking) cases; and
Surrounding circumstances cases (most recent).
There are important factors to consider in protecting the wishes of the member as expressed in their BDBN from challenges after their passing which stem from: the way the BDBN is prepared (called the BDBN “formalities” which was topical in 2022 in the High Court decision of Hill v Zuda); and the validity of the signing of the BDBN. The various court decisions considered in this paper are largely more focused on the latter issues and will comprise the majority of this paper. Issues regarding BDBN formalities will be given brief mention.
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